Harvest Capital Credit Corporation Announces September 30, 2013 Financial Results and Declares Dividends for October, November

  Harvest Capital Credit Corporation Announces September 30, 2013 Financial
  Results and Declares Dividends for October, November and December

Business Wire

NEW YORK -- November 12, 2013

Harvest Capital Credit Corporation (“Harvest Capital” or the “Company”)
(NASDAQ:HCAP), announced that its Board of Directors has declared dividends of
$0.1125 per share for the months of October, November and December. The
October dividend is payable on November 29, 2013 to shareholders of record on
November 21, 2013. The November dividend is payable on December 26, 2013 to
shareholders of record on December 19, 2013. The December dividend is payable
on January 23, 2014 to shareholders of record on January 16, 2014. These
dividends equate to an annualized dividend yield of 9% based upon the
Company’s $15.00 per share IPO price.

September 30, 2013 Financial Results

Harvest Capital also announced financial results for the three and nine months
ended September 30, 2013.


FINANCIAL HIGHLIGHTS

                  Three Months Ended        Three Months Ended      Nine Months Ended       Nine Months Ended
                     September 30, 2013           September 30, 2012         September 30, 2013         September 30, 2012
                                    Per                          Per                        Per                        Per
                     Amount       share         Amount       share       Amount       share       Amount       share
                                    (1, 2)                       (1,                        (1,                        (1,
                                                                 2)                         2)                         2)
                                                                                                              
Core net
investment           $1,390,827     $0.23         $526,012       $0.50       $3,521,692     $0.91       $1,190,538     $1.56
income (3)
Net investment       $1,474,091     $0.24         $209,171       $0.20       $3,501,895     $0.91       $855,144       $1.12
income ("NII")
Net unrealized
appreciation         $(360,137)     $(0.06)       $1,584,207     $1.50       $98,991        $0.03       $1,676,972     $2.19
(depreciation)
Net income           $1,113,954     $0.18         $1,793,378     $1.70       $3,600,886     $0.93       $2,532,116     $3.31
Weighted
average shares       6,097,708                    1,057,662                  3,856,705                  764,689
outstanding
(basic)
Weighted
average shares       6,098,160                    1,057,662                  3,857,157                  764,689
outstanding
(diluted)


(1)   All per share amounts are basic and diluted unless indicated
        otherwise.

        The Company acquired all of the interests of Harvest Capital Credit
        LLC (“HCC LLC”) on May 2, 2013 and did not have any operations prior
        to the acquisition. As such, for the periods prior to the acquisition,
        we are presenting the historical financial results of HCC LLC as our
        financial results. When we acquired HCC LLC, we issued shares of our
(2)     common stock in exchange for all of HCC LLC's outstanding membership
        interests at a rate of .9913 shares for each membership interest. As a
        result of this transaction, we have retroactively applied the
        aforementioned exchange/conversion rate to all unit measurements
        relating to HCC LLC's membership interests for both periods presented
        and have replaced all references to membership interests of HCC LLC
        herein with shares of common stock of the Company.

        Core Net Investment Income and Core Net Investment Income per share
        are non-GAAP financial measures that are calculated by excluding
        changes in the accrued capital gains incentive fees that affect Net
        Investment Income for GAAP purposes. Such accrued fees are related to
        the cumulative net unrealized appreciation in the Company’s investment
        portfolio as of September 30, 2013. The capital gains incentive fee is
        determined and paid annually with respect to realized capital gains
        (but not unrealized capital gains) to the extent such realized capital
(3)     gains exceed realized and unrealized capital losses for such year. As
        a result, the capital gains incentive fee that will be paid by the
        Company for its 2013 fiscal year cannot be determined prior to the end
        of the year and will only be paid with respect to the excess, if any,
        of the Company’s realized capital gains through December 31, 2013,
        over all realized and unrealized capital losses through December 31,
        2013. Reconciliations of Core Net Investment Income and Core Net
        Investment Income per share to the most directly comparable GAAP
        financial measure are set forth in Schedule 1 hereto.



PORTFOLIO ACTIVITY

                   September          December
                30,             31,                           
                   2013               2012
Portfolio
investments        $51,749,013     $41,511,318
at fair
value
Total assets       $91,451,241        $49,745,038
Net assets         $89,790,816        $19,806,327
Shares             6,111,961          1,172,688
outstanding
Net assets         $14.69             $16.89
per share
                                                                           
                   Three Months Ended                   Nine Months Ended
                   September          September         September          September
                   30,             30,            30,             30,
                   2013               2012              2013               2012
Portfolio
Activity
during the
period:
New                $13,300,000        $3,450,000        $18,800,000        $18,825,000
commitments
New fundings
on existing        -                  -                 1,600,000          -
commitments
Exits of           $(2,500,000)    -              $(6,736,117)    -
commitments
Net activity       $10,800,000        $3,450,000        $13,663,883        $18,825,000
                                                                           
                                                                           
                   September          December
                   30,             31,
                   2013               2012
Weighted
average
yield of
debt
investments:
at fair            17.6%              17.6%
value (1)
at cost (2)        17.7%              17.7%


        Computed as (a) annual stated interest rate or yield earned plus the
(1)   net annual amortization of original issue discount and other deferred
        fees earned on accruing debt investments, divided by (b) total debt
        investments at fair value.

        Computed as (a) annual stated interest rate or yield earned plus the
(2)     net annual amortization of original issue discount and other deferred
        fees earned on accruing debt investments, divided by (b) total debt
        investments at amortized cost.


OPERATING RESULTS

For the quarter ended September 30, 2013 the Company reported a 38% decrease
in net income, a 164% increase in Core Net Investment Income and a 605%
increase in Net Investment Income compared to the quarter ended September 30,
2012. Net income for the quarter ended September 30, 2013 was $1,113,954, or
$0.18 per share, compared to $1,793,378, or $1.70 per share, for the quarter
ended September 30, 2012. Core Net Investment Income was $1,390,827, or $0.23
per share, for the quarter ended September 30, 2013 compared to $526,012, or
$0.50 per share, for the quarter ended September 30, 2012. Net Investment
Income was $1,474,091, or $0.24 per share, for the quarter ended September 30,
2013 compared to $209,171, or $0.20 per share, for the quarter ended September
30, 2012.

For the nine months ended September 30, 2013, the Company reported a 42%
increase in net income, a 196% increase in Core Net Investment Income and a
310% increase in Net Investment Income compared to the nine months ended
September 30, 2012. Net income for the nine months ended September 30, 2013
was $3,600,886, or $0.93 per share, compared to $2,532,116, or $3.31 per
share, for the nine months ended September 30, 2012. Core Net Investment
Income was $3,521,692, or $0.91 per share, for the nine months ended September
30, 2013 compared to $1,190,538, or $1.56 per share, for the nine months ended
September 30, 2012. Net Investment Income was $3,501,895, or $0.91 per share,
for the nine months ended September 30, 2013 compared to $855,144, or $1.12
per share, for the nine months ended September 30, 2012. As of September 30,
2013, total assets were $91.5 million, net assets were $89.8 million and the
net asset value per share was $14.69.

During the third quarter of 2013, the Company closed a $4.0 million senior
secured debt investment in Infinite Aegis, an operator of urgent care
facilities. The investment carries an interest rate of LIBOR plus 15.0% all of
which is cash interest. As part of the investment the Company also acquired
common equity warrants representing a 3% ownership of the portfolio company on
a fully diluted basis and received an upfront fee at closing.

The Company also closed a $4.3 million junior secured subordinated debt
investment in Americana Holdings (“Americana”), a real estate brokerage
services company. The investment carries a fixed interest rate of 13.0% all of
which is cash interest. As part of the investment the Company acquired a
royalty security in the business which allows the Company to earn a percentage
of Americana’s future revenue growth. The Company also received an upfront fee
at closing.

Also during the quarter, the Company received a $2.5 million payoff at par of
its investment in WBL, SPE I, LLC (“WBL”), a small business lender. The exit
of this transaction produced accelerated fee amortization on the investment of
$49.7 thousand and an internal rate of return of over 25%. Subsequent to the
exit of this particular investment in WBL, the Company re-invested in WBL,
committing $5.0 million to the senior secured credit facility that was used to
pay off our original investment. $1.25 million of our commitment was funded at
close. The Company’s commitment represented 25% of the total $20.0 million
financing arranged by another financial institution. The new commitment
carries a fixed interest rate of 15%, all of which is cash interest. The
Company also received an upfront fee at closing.

“Third quarter deployment was not as robust as we had originally planned based
on the early activity of the quarter. While maintaining our credit and pricing
discipline throughout the quarter, we did close three transactions: two
entirely new investments and one investment in a refinancing transaction to an
existing portfolio company totaling $13.3 million in investment commitments.
The portfolio continued to perform well during the quarter with a 1.88
weighted average internal risk rating as of September 30, 2013,” said Richard
P. Buckanavage, President and CEO. “Going into the fourth quarter, we are
witnessing market activity at a level not seen since the third and fourth
quarters of 2012, giving our origination efforts substantial momentum. The
uptick began in early September and has allowed us to begin the fourth quarter
of this year in a strong position by closing three additional investments
totaling $12.5 million in investment commitments since quarter end,” added Mr.
Buckanavage

Our historical expense structure changed as a result of our completion of the
IPO as follows:

  *The base management fee payable to our investment adviser prior to the IPO
    was calculated at an annual rate of 2.0% of our gross assets, including
    assets acquired with the use of borrowings. However, our investment
    adviser had agreed to waive the base management fee payable to it prior to
    the IPO with respect to any assets acquired by us through the use of
    borrowings under our secured revolving credit facility with JMP Group LLC
    until such time that the facility had been repaid in full and terminated.
    Moreover, our investment adviser received a base management fee prior to
    the IPO with respect to cash and cash equivalents held by us. Subsequent
    to the IPO, the base management fee is calculated based on our gross
    assets (which includes assets acquired with the use of leverage, but
    excludes cash and cash equivalents) at an annual rate of 2.0% on gross
    assets up to and including $350 million, 1.75% on gross assets above $350
    million and up to and including $1 billion, and 1.5% on gross assets above
    $1 billion. Moreover, the waiver agreement described above with respect to
    assets acquired by us through the use of borrowings under the secured
    revolving credit facility was terminated in connection with our IPO. As a
    result, a base management fee is now payable to our investment adviser on
    all assets acquired by us through the use of borrowings.
  *Our investment adviser has agreed to permanently waive all or such portion
    of the incentive fee that it would otherwise collect from us to the extent
    necessary to support a minimum dividend yield of 9% for the period of time
    commencing with our IPO through March 31, 2014. The minimum dividend yield
    of 9% is paid on shares of our common stock currently outstanding and the
    shares of common stock issued pursuant to our dividend reinvestment plan
    during the waiver period, and is calculated based upon our IPO price of
    $15 per share. Incentive fee expense for the quarter ended September 30,
    2013 was a reversal of $83,264 in incentive fee expense accrued prior to
    the IPO on the Company’s net unrealized appreciation and not exceeding the
    income incentive fee hurdle for the period of time following the IPO
    through the end of the third quarter of 2013. The Company had net
    depreciation of $360,137 in the quarter and net depreciation of $416,321
    since the IPO. The reversal of incentive fee expense is equal to 20% of
    the net depreciation in the portfolio since the IPO.
  *Only a portion of the 2013 periods (i.e., from May 2, 2013, the date of
    our IPO, to September 30, 2013) reflect the change in our historical
    expense structure for the items noted above as well as our operations as a
    public company. As a result, the full impact of such changes will be more
    evident in future periods.

CREDIT QUALITY

The Company employs an investment rating system to categorize its investments.
In addition to various risk management and monitoring tools, the Company
grades the credit risk of all investments on a scale of 1 to 5 no less
frequently than quarterly. Under this system, an investment with a grade of 1
involves the least amount of risk and indicates performance from the portfolio
company that exceeds underwritten expectations. Investments graded 2 involve a
level of risk that is similar to the risk at the time of origination or
acquisition. The portfolio company is generally performing as expected and the
risk factors to our ability to ultimately recoup our investment are neutral to
favorable. All investments in new portfolio companies are initially assessed a
grade of 2. Investments graded 3 indicate that the portfolio company is
performing below expectations and requires closer monitoring. Investments
graded 4 indicate performance substantially below expectations where some loss
of return but no loss of principal is expected; however, payments are
generally not more than 90 days past due. An investment grade of 5 indicates
that the risk to our ability to recoup our investment has substantially
increased since origination or acquisition, the portfolio company likely has
materially declining performance, and some loss of return and principal is
expected. For debt investments with an investment grade of 5, most or all of
the debt covenants are out of compliance and payments are substantially
delinquent.

As of September 30, 2013, the weighted average grade of the investments in our
portfolio was 1.88. Also, as of September 30, 2013, twelve of the Company’s
debt investments were rated 2. Two investments were rated 1 and one was rated
3. No loans were rated 4 or rated 5 or were on non-accrual status as of
September 30, 2013.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2013, we had $38.8 million of unrestricted cash and had
$50.0 million in availability under our secured revolving credit facility with
JMP Group LLC, but no outstanding borrowings thereunder. When we completed our
IPO in May 2013, we paid down the balance of our secured revolving credit
facility with JMP Group LLC with a portion of the net proceeds.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO SEPTEMBER 30, 2013

On October 29, 2013, the Company closed on a new $55 million credit facility
(the “Credit Facility”) with CapitalSource Bank and City National Bank. The
new Credit Facility is secured by all of the Company’s assets and has a two
year revolving period and a three year amortization period. Advances under the
Credit Facility bear interest at a rate of LIBOR plus 4.50%. The new Credit
Facility also has an accordion feature that allows the size of the facility to
increase to $85 million. The new Credit Facility replaces the Company’s senior
secured revolving credit facility with JMP Group LLC, which was terminated
concurrently with the Company’s entry into the new Credit Facility.

On October 4, 2013, the Company closed a $5.0 million senior secured debt
investment in PD Products, a manufacturer and distributor of novelty products.
The investment carries an interest rate of LIBOR plus 10.50% with a LIBOR
floor of 1.50%. As part of the investment the Company also received an upfront
fee at closing.

On October 8, 2013, the Company closed a $4.5 million second lien term loan
investment in Arsloane (Pitney Bowes), a document and information management
solutions company. The investment carries an interest rate of LIBOR plus
10.50% with a LIBOR floor of 1.25%. Our cost in the investment is 98.6% of
par. The 1.4% discount will be deferred and accreted into interest income over
the life of the investment.

On October 29, 2013, the Company received a $2.0 million payoff at par of its
investment in Blackboard, Inc., a software provider for schools. As part of
the payoff, the Company received a prepayment penalty of $60.0 thousand and
had accelerated fee amortization of $166.4 thousand. The transaction produced
an internal rate of return of over 20%.

On October 30, 2013, the Company increased its debt investment by $3.0 million
in one of its existing portfolio companies, CRS Reprocessing (“CRS”). The
investment was in the same security as the original investment in CRS and
carries the same interest rate.

CONFERENCE CALL

The Company will host a conference call on Tuesday, November 12, 2013 at 10:00
a.m. Eastern Time to discuss its third quarter results. All interested parties
are invited to participate in the conference call by dialing (888) 566-6060.
Participants should enter the Conference ID 98755854 when prompted.

ABOUT HARVEST CAPITAL CREDIT CORPORATION

Harvest Capital Credit Corporation (NASDAQ:HCAP) provides customized financing
solutions to privately held small and mid-sized companies in the U.S.,
generally targeting companies with annual revenues between $10 million and
$100 million and annual EBITDA between $2million and $15 million. The
Company’s investment objective is to generate both current income and capital
appreciation primarily by making direct investments in the form of
subordinated debt and, to a lesser extent, senior debt as well as minority
equity investments. Harvest Capital Credit Corporation is externally managed
and has elected to be treated as a business development company under the
Investment Company Act of 1940.

Forward Looking Statements

Statements other than statements of historical facts included in this press
release may constitute forward-looking statements and are not guarantees of
future performance or results and involve a number of assumptions, risks and
uncertainties, which change over time. Actual results may differ materially
from those anticipated in any forward-looking statements as a result of a
number of factors, including those described from time to time in filings by
the Company with the Securities and Exchange Commission. The Company
undertakes no duty to update any forward-looking statement made herein. All
forward-looking statements speak only as of the date of this press release.


Harvest Capital Credit Corporation
Statements of Assets and Liabilities


                                        September 30,     December 31,
                                           2013                 2012
                                           (unaudited)
                                                                
ASSETS:
Non-affiliated/non-control
investments, at fair value (cost of        $  50,173,062        $  39,595,162
$47,704,894 @ 9/30/13 and
$37,637,558 @ 12/31/12)
Affiliated investments, at fair
value (cost of $1,987,525 @ 9/30/13          1,575,951           1,916,156
and $1,916,156 @ 12/31/12)
Total investments, at fair value
(cost of $49,692,419 and                      51,749,013           41,511,318
$39,553,714, respectively)
                                                                
Cash                                          38,804,740           7,639,801
Interest receivable                           322,570              166,592
Accounts receivable - other                   48,073               -
Deferred financing costs                      221,303              180,786
Other assets                                 305,542             246,541
Total assets                               $  91,451,241        $  49,745,038
                                                                
                                                                
LIABILITIES:
Revolving line of credit - related         $  -                 $  28,226,666
party
Accrued interest payable - related            63,194               304,293
party
Accounts payable and accrued                  1,273,915            1,231,006
expenses
Other liabilities                            323,316             15,971
Total liabilities                             1,660,425            29,777,936
                                                                
Commitments and contingencies
                                                                
Mezzanine equity                              -                    160,775
                                                                
NET ASSETS:
Common stock; 100,000,000 shares
authorized, and 6,111,961 and                 6,112                17,266,955
1,172,688 issued and outstanding ,
respectively
Capital in excess of common stock             87,728,108           581,768
Net unrealized appreciation on               2,056,596           1,957,604
investments
Total net assets                             89,790,816          19,806,327
Total liabilities and net assets           $  91,451,241        $  49,745,038
                                                                
Common stock issued and outstanding           6,111,961            1,172,688
                                                                
Nets asset value per common share          $  14.69             $  16.89



Harvest Capital Credit Corporation
Statements of Operations (unaudited)


                              Three Months     Three          Nine Months    Nine Months
                                                     Months
                                 Ended               Ended             Ended             Ended
                                 September 30,       September         September         September
                                 2013                30, 2012          30, 2013          30, 2012
                                                                                         
Investment Income:
Interest:
Cash -
non-affiliated/non-control       $ 1,565,699         $ 844,352         $ 4,340,757       $ 2,001,215
investments
Cash - affiliate                   56,210              -                 165,554           -
investments
PIK -
non-affiliated/non-control         242,865             130,306           795,702           339,567
investments
PIK - affiliate                    14,396              -                 42,611            -
investments
Fee amortization, net             172,385           42,637           550,950          87,921
Total interest income              2,051,555           1,017,295         5,895,574         2,428,703
Other income                      -                 -                -                40,000
Total investment income           2,051,555         1,017,295        5,895,574        2,468,703
                                                                                         
Expenses:
Interest expense -                 -                   183,705           627,568           568,466
revolving line of credit
Interest expense - unused          63,889              26,852            115,360           68,766
line of credit
Interest expense -                10,882            9,243            35,786           27,142
deferred financing costs
Total interest expense             74,771              219,800           778,714           664,374
                                                                                         
General and administrative         265,492             31,721            608,416           91,947
Base management fees               250,048             78,259            497,120           156,710
Incentive management fees          (83,264   )         448,344           303,179           633,028
Administrative services           70,417            30,000           206,250          67,500
expense
Total expenses                    577,464           808,124          2,393,679        1,613,559
                                                                                         
Net investment income              1,474,091           209,171           3,501,895         855,144
                                                                                         
Net change in unrealized
(depreciation)                    (360,137  )        1,584,207        98,991           1,676,972
appreciation on
investments
Total net unrealized
(losses) gains on                  (360,137  )         1,584,207         98,991            1,676,972
investments
                                                                                      
Net increase in net assets       $ 1,113,954        $ 1,793,378       $ 3,600,886       $ 2,532,116
resulting from operations
                                                                                         
                                                                                         
Net investment income per        $ 0.24              $ 0.20            $ 0.91            $ 1.12
share (basic and diluted)
Net increase in net assets
resulting from operations        $ 0.18              $ 1.70            $ 0.93            $ 3.31
per share (basic and
diluted)
Weighted average shares            6,097,708           1,057,662         3,856,705         764,689
outstanding (basic)
Weighted average shares            6,098,160           1,057,662         3,857,157         764,689
outstanding (diluted)



SCHEDULE 1

Reconciliations of Net Investment Income to Core Net Investment Income

              Q3 '13                   Q3 '12                YTD '13                 YTD '12
                                Per                       Per                        Per                        Per
                 Amount       share        Amount     share       Amount       share       Amount       share
                                (1)                       (1)                        (1)                        (1)
                                                                                                       
Net
investment       $1,474,091     $0.24        $209,171     $0.20       $3,501,895     $0.91       $855,144       $1.12
income
Plus:
incentive
fees
attributed
to the
capital
gains
incentive        $(83,264)    -$0.01       $316,841   $0.30       $19,797      $0.01       $335,394     $0.44
fee
Core net
investment       $1,390,827     $0.23        $526,012     $0.50       $3,521,692     $0.91       $1,190,538     $1.56
income


(1)   Per share data has been adjusted for the conversion rate of 0.9913
        shares for each unit.

Contact:

Investor & Media Relations
Harvest Capital Credit Corporation
Richard Buckanavage, 212-906-3592
President & Chief Executive Officer
rbuckanavage@harvestcaps.com
or
Craig Kitchin, 678-392-3150
Chief Financial Officer
ckitchin@harvestcaps.com
 
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